Economy News - September 2014

The latest figures released by The Council of Mortgage Lenders show that mortgage lending rose to just over 19 billion pounds in July to reach the highest monthly total since August 2008. The figure also represents an increase of 7 per cent over June and is 15 per cent higher than July last year, despite tougher lending criteria introduced earlier this year.

Meanwhile, the Bank of England has halved its forecast for average wage growth, expecting average salaries to rise by 1.25 per cent this year, following official figures showing that average wages excluding bonuses grew by 0.6 per cent, the slowest pace of growth since records began in 2001. Nevertheless, the Bank upgraded its growth forecast by 0.1 per cent both for this year and for 2015 to 3.5 per cent and 3 per cent respectively.

Hard on the heels of these forecasts and the news that inflation fell to 1.6 per cent in July, the Bank’s Monetary Policy Committee voted by seven to two to hold interest rates at their historic low of 0.5 per cent, unchanged since March 2009 – the first time there has been a split vote since July 2011, two members voting for a quarter percent rise.